Does Entrepreneurship improve Income Distribution in Africa?

Authors

  • Mark Kunawotor University of Professional Studies, Accra
  • Raymond Dziwornu University of Professional Studies, Accra
  • Michael Soku University of Professional Studies, Accra
  • Prince Fonu Ghana Institute of Public Administration and Management

Abstract

In this study, we examine the impacts that variant measures of entrepreneurship have on income inequality. We use the system Generalized Method of Moments estimation strategy on a panel data of some African countries for the period 1990 – 2017. The findings reveal that entrepreneurial activities do not improve income distribution in Africa even though self-employment has been appreciable in the continent. This can partly be explained by the economic motives for the entrepreneurial drives and the fact that average income in self-employment is significantly much lower than in paid employment. Also, total entrepreneurial activity exhibits a non-monotonic and U-shaped effect on income inequality with a threshold of 20.40 percent. These findings are robust to other alternative measures of entrepreneurship. The findings suggest that public policies must be directed towards promoting more opportunity entrepreneurs rather than necessity entrepreneurs if income distribution is to be improved.

Published

2024-06-20

How to Cite

Kunawotor, M., Dziwornu, R., Soku, M., & Fonu, P. (2024). Does Entrepreneurship improve Income Distribution in Africa?. International Journal of Economic Perspectives, 18(1). Retrieved from https://ijeponline.org/index.php/journal/article/view/525

Issue

Section

Peer Review Articles